The Hindu Business Line : ICICI Pru hikes capital base by Rs 150 cr

MS SHIKHA SHARMA, Managing Director & CEO, ICICI Prudential Life Insurance Co Ltd, and Mr K.R. Kamath, Executive Director, Bank of India, at the signing of the MoU with Bank of India's regional rural banks in Mumbai on Saturday. — Shashi Ashiwal

Mumbai , July 22

ICICI Prudential Life Insurance has hiked its capital base by Rs 150 crore in the first quarter. Ms Shikha Sharma, Managing Director and CEO, ICICI Prudential Life Insurance, said that the Rs 150-crore infusion would take the total capital base to Rs 1,335 crore.

The company has also seen over 150 per cent growth in new business premium in the first quarter of the current financial year, mainly on account of the strong demand for Unit Linked Insurance Plans (ULIPs), prior to the implementation of the new unit linked guidelines.

ULIPs

As per IRDA's new guidelines, which came into effect on July 1, there has to be a minimum lock-in period of five years for ULIPs and the death benefit payable or sum assured under the single-premium product has to be at least 125 per cent of the single premium paid.

Ms Sharma said the growth rate in the first quarter would not be sustained for the rest of the year. She, however, said that she expected the demand for ULIPs to be stable despite the new guidelines, but the size of average premium could fall by 5-10 per cent.

ICICI Prudential Life Insurance currently has Rs 9,300 crore as funds under management of which almost 50 per cent was invested in equity, Ms Sharma said.

Bancassurance tie-up

She was speaking at a press conference announcing a bancassurance tie-up with 10 regional rural banks (RRBs) sponsored by Bank of India. Together the ten banks have nearly 1,000 branches across semi-urban and rural areas.

Mr N.S. Kannan, Executive Director, ICICI Prudential, said the company hopes to increase the contribution of bancassurance to almost 30 per cent of the total new business premium, from last year's 23 per cent.

The bank is in the process of merging three RRBs in Uttar Pradesh and two in Maharashtra by next month, said Mr K.R. Kamath, Executive Director, Bank of India. This will bring down the number of RRBs sponsored by Bank of India from 16 to 7. For the current fiscal the target is Rs 8,250-crore business, which includes Rs 5,420-crore deposits and Rs 2,830-crore advances.

Bank of India will be one of the first banks to raise Tier-I or upper Tier-II capital through hybrid instruments in foreign currency, following the Reserve Bank of India's guidelines. "We have done our homework and we are ready," Mr Kamath said.

The bank already had approval for Medium Term Note programme of five-year bonds for $1 billion. Of this, it has so far raised only $250 million.

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